by John M. Curtis
(310) 204-8700

Copyright July 1, 2001
All Rights Reserved.

gnoring reality and acquiescing to the health plan industry won’t fix a broken managed care system—now begging congress for help. Passing the first patients’ bill of rights, the Senate completed its first watershed legislation since Sen. James M. Jeffords (R-Ver.) bolted the GOP, handing newly minted Sen. Majority Leader Tom Daschle (D-S.D) and the Democrats a rare political victory, but hardly a reason to jump for joy. At 1600 Pennsylvania Ave.—anticipating the setback— the president’s veto pen was filled with ink and ready for official duty. “I could not in good conscience sign this bill because it puts the interests of trial lawyers before the interests of patients,” said President Bush, echoing the views of the American Assn. of Health Plans, the major lobbying group for HMOs. “What the Senate is doing in voting for [the bill] is levying a trial lawyers’ tax on working families,” said AAHP president Karen Ignagni, reciting a familiar mantra that any legislation restricting HMOs punishes consumers by driving up medical premiums.

       While briefly stealing the headlines, health care reform still takes a back seat to the economy and missile defense. Since Clinton’s aborted attempt at national health care in 1993, the health plan industry has done a brilliant job of discrediting universal care, despite the fact that many tout the success of Medicare and Medicaid—universal care for seniors and the poor. Smelling politics and commenting about the Democrat’s recent coup, “What’s the sense of having a bill [the president] is going to veto? What do we gain, except some finger-pointing and some partisan shots?” said Secretary of Health and Human Services, Tommy G. Thomson, suggesting that Democrats were more interested in politics than serious health care reform. Blaming the Senate’s patients’ bill of rights on scheming Democrats conveniently ignores the nine moderate Republicans also supporting the legislation, including Bush’s nemesis Ariz. Sen. John McCain. With Jeffords jumping ship, Bush’s bigger problem involves alienating moderates within his own party and governing from the right.

       Trying to strip the bill of its liability, Republicans failed to cap pain and suffering awards and hold punitive damages to under $5 million. Getting the right to sue “fundamentally changes the relationship between patients and the managed care industry,” said associate professor Peter Jacobson at the University of Michigan School of public health. Fed up with rationed care, consumers finally pushed congress to correct a dangerous situation placing finances over sound medical decision making. Unable to self-regulate, the HMO industry has no one to blame but itself for consistently placing the bottom line over quality care. “Today’s vote brings us a giant step closer to guaranteeing that millions of Americans will no longer be powerless when their HMOs overrule their doctor and deny needed care,” said Edward M. Kennedy (D-Mass.), a key sponsor of the legislation. It’s a bit ironic that Bush’s position on the bill mirrors his views on energy, where he opposes price caps because they discourage more production. Like energy suppliers, HMOs must balance profit margins against consumers’ welfare.

       Interfering with medical decision making has always been a major criticism of managed care. Physicians and patients complained that medical decisions should be left to doctors and patients, not bureaucrats unconnected with delivering care. Among the key provisions, patients now have the right of direct access to emergency rooms, pediatricians, gynecologists, and other costly specialists, frequently denied by HMOs. Feeling railroaded, “We were pretty much stampeded into passing a bill. The House of Representatives has a huge responsibility to pass a bill that does not drive people into the ranks of the uninsured,” said Sen. Bill First (R-Tenn.), also mirroring the White House’s party line that the bill would push many employers to drop health coverage. In reality, the bill does nothing more than remind HMOs that once they’ve issued policies, they must abide by the terms and not weasel out of paying for benefits. Republicans, like First, sought to de-fang the bill by limiting damages to $500 thousand for pain and suffering and zippo for punitive damages. With toothless provisions like that, HMOs wouldn’t feel inclined to stop their practice of routinely denying needed treatments.

       Even with all the legislation’s provisions, the bill guarantees nothing to millions of Americans enrolled in managed health plans. Enabling injured parties to sue HMOs, the bill doesn’t favor trial lawyers or assure patients of recovering one nickel in damages. It simply takes HMOs off the privileged list of sacrosanct industries from the courts. No business—including non-profits—should be immune to paying for injuries caused by its own negligence and malice. Injuring or killing patients by denying needed medical benefits can’t be ignored by simply pretending that HMOs are not amenable to the courts. Requiring an independent appeals process before patients can sue assures the legitimacy of eventual claims against managed care organizations. But pointing fingers only at HMOs, without examining the role played to deny care by medical groups and hospitals, places blame unfairly on HMOs. When HMOs contract out for services, hospitals and medical groups must also take the heat for denying contractual medical benefits. Selling health plans on glossy paper is a far cry from delivering actual plan-benefits through medical groups and hospitals.

       More than any other piece of legislation in the new administration to date, the patients’ bill of rights underscores deep divisions within the GOP, namely, that 20% of the GOP voted with the Democrats. Opposing the bill and siding with the health plan industry, the White House opened the door to a presidential veto. Suggesting that the current bill would cast employees into the ranks of the uninsured by making health coverage unaffordable to employers totally ignores the Congressional Budget Office report indicating that the bill would cause only a 4.2% increase in annual premiums. Whoever pays the freight, it’s preferable to a system that offers great benefits on glossy paper but doesn’t deliver quality care in the doctor’s office. HMOs shouldn’t worry about lawsuits if they keep their noses out of physicians’ business. Like anything else, if they’re responsible for causing injuries, they should be held accountable like any other business. What good is medical insurance if you can’t use the benefits? No business—including HMOs—should be above the courts, simply because an archaic 1974 law that exempted them from litigation.

About the Author

John M. Curtis is editor of OnlineColumnist.com and columnist for the Los Angeles Daily Journal. He’s director of a Los Angeles think tank specializing in political consulting and strategic public relations. He’s the author of Dodging The Bullet and Operation Charisma.

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